Salaries Drop as Performance Worsens
Annual salaries of chaebol tycoons and CEOs of Korean companies that posted a poor business performance have dropped significantly.
Lotte Group chairman Shin Dong-bin topped the list of highest-paid chaebol tycoons by receiving a total of 18.81 billion won from Lotte affiliates such as Lotte Holdings and Lotte Chemical in 2019, according to the Electronic Disclosure System of the Financial Supervisory Service on March 30.
CJ Group chairman Lee Jae-hyun received a total of 12.4 billion won in compensation from affiliates such as CJ Corp., the group’s holding company, and CJ CheilJedang. Hyundai Motor Group chairman Chung Mong-koo received more than 7 billion won in 2019. Compared to the previous year, when Chung’s annual salary exceeded 9.5 billion won, the amount decreased. SK Group chairman Chey Tae-won received a total of 6 billion won in 2019, 3 billion won each from the holding company of SK Group and SK Hynix. LG Group chairman Koo Kwang-mo received about 5.4 billion won from LG Holdings.
HDC Group chairman Chung Mong-kyu, who recently acquired Asiana Airlines together with Mirae Asset Group, received over 4.2 billion won from HDC and HDC Hyundai Industrial Development. Lee Bu-jin, president of Hotel Shilla, received 3.2 billion won, up from 2.6 billion won in the previous year. Hyosung Group chairman Cho Hyun-jun enjoyed a 10 percent increase in his annual salary as it rose from 4.1 billion won to 4.5 billion won.
Meanwhile, the late Chairman Cho Yang-ho of the Hanjin Group which had suffered from a management right dispute received more than 70 billion won including his annual salary and retirement allowance from Hanjin KAL, Hanjin, Korean Air, and Jin Air in 2019.
Annual salaries of owners of groups whose business performances deteriorated in 2019 plummeted. In the case of Chairman Lee Jae-hyun in 2018, his annual salary exceeded 16 billion won so his annual salary plunged by nearly four billion won in 2019. Doosan Group Chairman Park Jeong-won, who received 4.9 billion won in annual salary from Doosan Corporation in 2018, received 3.98 billion won in 2019. Doosan Infracore Chairman Park Yong-man's annual salary decreased from 4.3 billion won to 3.9 billion won.
On the other hand, LG Group chairman Koo Kwang-mo reported that he received 1.27 billion won in compensation in 2018 but in 2019, with his inauguration as chairman, it rose to 5.93 billion won. Suh Gyeong-bae, chairman of the Amorepacific Group, reported 3,470 million won as his annual salary to the tax office in 2019. The amount was similar to that of the previous year.
Among professional managers of large companies, Chairman Cho of the SK Group Supex Pursuit Council received the highest compensation. Chairman Cho received 4.46 billion won in 2019 and surpassed Kwon Oh-hyun, chairman of Samsung Electronics' Institute of Technology (46.37 billion won) by a whisker. In addition, Choi Chi-hoon, CEO of Samsung C&T received 3,934 million won, Park Geun-tae, CEO of CJ Korea Express 3,862 million won, Park Sung-wook, vice chairman of SK Hynix, 3,741 million won, Jang Dong-hyun, president of SK Corporation, 3.539 million won) and Cho Sung-jin, Vice President of LG Electronics (3,387 million won). Lee Jae-yong, vice chairman of Samsung Electronics, has not received any salary for three years since March 2017.
However, professional managers’ salaries were directly related to the deterioration of corporate performance. CJ Group Chairman Sohn Kyung-shik who earned the highest annual salary as a professional manager by receiving 8.88 billion won in 2018, received 3.35 billion won from CJ CheilJedang in 2019, less than half of his annual salary in 2018. This was because CJ CheilJedang's earnings fell so Sohn did not receive a bonus. Professional managers of Samsung Electronics saw the company’s earnings slide in 2019, so their annual salary was significantly cut, while the annual salary of CEO Kim Tae-han of Samsung Biologics was halved from 3.8 billion won to 1.9 billion won with a sharp drop in his incentives.